Maharashtra Result assembly elections is expected to have minimal impact on the Indian stock market, although it could have significant political implications, according to experts. Although state elections do not have a direct impact on the functioning of the central government, they can still have some second-order effects.

Maharashtra is set to vote on Wednesday, November 20.

Experts point to a tight fight between the alliances led by the BJP and the Congress. The return of the BJP-led alliance will signal policy continuity with a focus on infrastructure and capital spending, while the victory of the Congress-led alliance may result in a change in policies and perhaps a greater focus on rural welfare and a slowdown in infrastructure projects. .

“A victory for the BJP-led alliance would signal policy continuity with a focus on infrastructure and investment. A victory for the Congress-led alliance would see a pivot to rural spending and a possible slowdown in some key infra projects. Fiscal discipline would be to watch out for , given the state debt looming over Maharashtra and two decades of financial indiscipline,” said Emkay Global Financial Services.

How can Maharashtra elections affect the Indian market?

The assembly elections may temporarily influence market sentiment, but are unlikely to leave a lasting impact on the market.

A win or loss in these elections can influence public perception, trust and popularity of the ruling party or the opposing party, both at the state and national levels. This shift in confidence can indirectly affect certain policy decisions and even the central government’s approach to certain issues.

According to Narendra Solanki, head of fundamental research – investment services at Anand Rathi Shares and Stock Brokers, if the current side holds on, we may not see a major change in the current policy trajectory. Continuity would likely ensure the expansion of existing policies and spending patterns. This stability can provide a sense of predictability for investors and markets as the direction of governance is expected to remain the same.

However, Solanki added, if a new party takes control, there could be a temporary period of uncertainty.

“Markets may react cautiously as they await clarity on the new government’s stance on policy matters and their approach to economic and social issues. This period of indecision may last until the new government settles in and clarifies its priorities and political direction,” said. Solanki.

Abhishek Jain, head of research at Arihant Capital, pointed out that the Indian market is facing volatility and a corrective phase ahead of the assembly elections, driven largely by cautious sentiment over the BJP’s potential performance.

In addition, global factors played a role, with capital outflows from emerging markets such as India and South Korea to developed markets.

“More sales could happen if the BJP-led alliance falters in key states like Maharashtra. However, instead of focusing solely on state election results, investors could consider gradually building positions and reducing cash exposure as part of a long-term discipline. strategy,” Jain said.

Vishnu Kant Upadhyay, AVP for research and advisory at Master Capital Services, pointed out that Indian benchmark indices have rebounded strongly ahead of the November 20 Maharashtra state assembly elections.

Upadhyay pointed out that market expectations could be fueled by a clear mandate for a business-friendly government, which will boost investor confidence and attract investment.

“Maharashtra elections are crucial and could affect the stock market as the state is one of the most industrialized in India and contributes substantially to the nation’s GDP,” Upadhyay said.

“Following the formation of a new administration, investors will closely monitor policy statements. While the Maharashtra elections are a significant event for the stock market, market performance is not solely driven by them. Additional elements including the state of the world economy, company profits and investor sentiment are also quite important,” said Upadhyay.

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